The Analysis Of Financial Statements - 1876 Words

The analysis of financial statements is the critical process that is aimed at assessing the present and past financial position and the results of operations that are carried out in a company. The primary objective of this analysis is to establish the best possible estimates and predictions about future results and conditions that the company can reach. It is based on two primary pieces of knowledge, where the first is the in-depth knowledge of the accounting model and the second would be the domain of the tools used for the financial analysis, which enables the identification and analysis of the relationship between financial and operational factors. For that reason, the financial analysis is a working tool widely used by the directors†¦show more content†¦A viable alternative to solve this problem is based on providing the company the analytical tools necessary to include indicators of liquidity, solvency, and profitability, but also serve as support for the process of adm inistrative decisions of the enterprise. A company’s financial information will assess the operation of the business and provide the real financial condition of the entity as well as the efficiency of the management. The financial statements of a company facilitate efficient and effective decision making. The financial analysis of a corporation helps assess the financial growth of the enterprise. Effective decision making leads to proper management of company resources. BUSINESS ANALYSIS Unfortunately, the company does not have an efficient financial model that can provide the financial information needed to measure its economic indicators. Currently, the company only has some accounting reports, provided by the accounting department of the enterprise, such as purchase and